MERCHANT BANK OF SRI LANKA LIMITED v. AMARASIRI DE SILVA

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MERCHANT BANK OF SRI LANKA LIMITED
v.
AMARASIRI DE SILVA
SUPREME COURTS.N. SILVA, C.J.
BANDARANAYAKE,. J. ANDISMAIL, J.
SC (APPEAL) NO. 79/99 (A)
SC (HC) LA APPLICATION NO. 9/99(HC/ARB/34/97)
AND
(HC/ARB/127/98)
29th NOVEMBER, 2000
Arbitration – Arbitration Act, No. 11 of 1995 – Requirement to deliver acopy of the award to each party – Section 25(4) of the Act – Applicationfor enforcement of the award under section 31(1) of the Act ■ Whetherthe registered article postal receipt must be attached to such applicationin proof of the communication of the award under section 25(4).
In arbitration proceedings between the appellant and the respondent, theRegistrar of the Sri Lanka National Arbitration Centre had sent a letterdated 13.12.1996 to the appellant with the original of the award dated27.11.1996. The letter stated that a copy of the award was sent to therespondent’s address. The appellant made an application on 17.07.1997for enforcement of the award In terms of section 31 (1) of the ArbitrationAct, No. 11 of 1995 (“the Act”)
The High Court of Colombo refused to enforce the award on the groundthat the reglstrated postal article receipt In proof of the communication ofthe award was not attached. Thereafter the appellant filed a petition andaffidavit with a motion dated 4.11.1998 In the High Court tendering therelevant postal article receipt dated 17.12.1996 but submitted that it wasnot mandatory to attach the receipt. The High Court disallowed theappellant’s application for non-compliance with section 25(4) of the Actwhich required that a copy of the award shall be delivered to each party.
Held :
The delivery of the award to the parties Is mandatory. However, In thecircumstances the appellant had adduced sufficient evidence of compli-ance with section 25(4) as to the delivery of the award to the respondent.Hence the High Court should take action In terms of section 31(6) of theAct.
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Merchant Bank of Sri Lanka Limited u. Amaraslrt de Stlva
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APPEAL from the Judgment of the High Court of Colombo.Romesh de Silva, RC. with Hlran de Alwls for appellant.Jejry Zalnudeen for respondent.
Cur. adv. vult.
March, 27, 2001.
SHIRANI A. BAND ARANAYAKE, J.This Is an appeal from the judgment of the High Court ofColombo dated 24.04.1998. Leave to appeal was granted bythis Court by Order dated 22.09.1999 The facts are briefly asfollows:
The appellant entered Into a lease agreement, bearing No.94/2501 dated 23.09.1994 with the respondent In Colombo.In terms of clause 16 of the said lease agreement, provision wasmade for recourse to arbitration. In the event of any disputebetween the appellant and the respondent. In April 1996, theappellant Informed the respondent that a sum of Rs.712,826/79 was due from him as at 31st October 1995. The appellantthen informed the respondent that he is referring this disputethat had ensued, for arbitration and in terms of clause 16 ofthe lease agreement, requested the respondent to nominate anarbitrator within a week from the date of his letter. Therespondent failed to nominate an arbitrator and the solearbitrator, nominated by the appellant, fixed arbitrationproceeding for 07.10.1996. The respondent was informed ofthe commencement of the arbitration proceedings.
By his letter dated 07.10.1996, respondent undertook tosettle his dues and wanted time to meet the Bank officials buthad failed to do so. When the proceedings commenced on05.11.1996, the respondent was absent and unrepresented andthe arbitrator proceeded with the inquiry ex-parte.
The arbitrator made an award dated 27.11.1996 and theRegistrar of the Sri Lanka National Arbitration Centre, had sent
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Sri Lanka Law Reports
120011 1 Sri L.R.
a letter dated 13.12.1996, to the appellant with the original ofthe award. In that letter It Is stated that a copy of the award wassent to the address of the respondent. The appellant made anapplication on 17.071997 for the registration and enforcementof the said arbitral award in terms of section 31(1) of theArbitration Act, No. 11 of 1995.
The High Court of Colombo refused to enforce the arbitralaward on the ground that the registered postal article receipt,in proof of the communication of the arbitral award to therespondent was not attached. The appellant thereafter filed apetition and affidavit with a motion dated 04.11.1998 in theHigh Court of Colombo tendering the relevant postal article andsubmitted however that it was not mandatory to attach theregistered postal article receipt. The High Court Judge, by orderdated 04.11.1998, disallowed the appellant’s application fornon-compliance of section 25(4) of the Arbitration Act, No. 11of 1995.
Section 25(4) of the Arbitration Act, No. 11 of 1995 states that,
“After the award is made, a copy signed by the arbitratorsconstituting the arbitral tribunal in accordance withsubsection! 1) of this section shall be delivered to each party. ’’
According to Russell,
“. . . a requirement that the award be delivered will besatisfied when it has been notified to the parties by serviceof a copy on each one of them (Russell on Arbitration, 21stedition, 1997, pg.275).”
Thus section 25(4) of the Arbitration Act, No. 11 of 1995, clearlyrequires that a signed copy of the arbitral award be delivered toeach party after it is made by the tribunal. Such delivery of theaward to the parties, in my view, is mandatory considering theconsequential steps that could be taken by the parties in relationto the enforcement of the award thus communicated, viz, to
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Merchant Bank of Srt Lanka Limited v. Amaraslri de Silva
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enforce or to set it aside in terms of section 31 or 32 of theArbitration Act, No. 11 of 1995.
It appears that at the time this matter was taken up at the HighCourt, Colombo, the original registered postal article receipt inproof of the communication of the arbitral award to therespondent, was not attached to the petition. However, by motiondated 04.11.1998, the appellant had produced the originalregistered postal article receipt dated 17.12.1996 and the pinkslip, certifying the registered postal article receipt. In fact theappellant had brought it to the notice of Court by his petitiondated 04.11.1998 that the original of the registered postal articlereceipt was filed in a similar application in High CourtArbitration case No. 26/97.
In these circumstances, I hold that the appellant has adducedsufficient evidence of compliance with the requirement in section25(4) of the Arbitration Act, No. 11 of 1995 as to the delivery ofthe award to the respondent. The appeal is accordingly allowedand the judgment dated 24.04.1998 of the High Court, Colombois therefore set aside. In all the circumstances, there will be nocosts.
This matter is referred back to the High Court for action to betaken in terms of section 31(6) of the Arbitration Act, No. 11 of1995.
S.N. SILVA, C.J. – I agree.
ISMAIL, J.- I agree.
Appeal allowed.